From our upcoming issue, read Jason Furman on why Biden’s economic policy fell short of its lofty goals.
With President Donald Trump now installed in the White House, economists and policymakers are grappling with how Americans’ views of the economy affected the outcome of the 2024 U.S. election. Despite promising economic indicators during President Joe Biden’s term, such as low unemployment, strong GDP growth, and rising wages, Trump’s victory highlighted a stark disconnect between macroeconomic data and voters’ lived experience, writes the Harvard economist Jason Furman in the forthcoming issue of Foreign Affairs. As falling inflation-adjusted household income and rising poverty rates made clear, the Biden administration’s economic agenda “fell considerably short of its lofty goals.”
To rebuild public trust and craft an ambitious economic program that can work, Democrats must abandon their “post-neoliberal delusion” and return to sound economic principles, Furman argues. Although Biden achieved important victories on climate change and semiconductor production, his administration’s dismissal of budget constraints and refusal to acknowledge economic tradeoffs ultimately undermined other crucial initiatives. “It’s fine to question economic orthodoxy,” Furman concludes. “But policymakers should never again ignore the basics in pursuit of fanciful heterodox solutions.”
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